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I. Historical Account of the Firm

A. History of the Firm

1 I. Historical Account of the Firm A. History of the Firm In 1895, Sun Life

In 1895, Sun Life Financial came to the Philippines from Canada, before the

establishment of the Republic of the Philippines, with its mission to give humanitarian

benefits of insurance to the Filipino people. When World War II broke out, operations

went underground, and the financial institution went on its way to pay post-war death

claims amounting to more than $1.3M, and has since then flourished to become a

respectable financial institution during economic crises and Martial Law. In 2000, the

financial institution became a public-traded stock company at the Philippine Stock

Exchange with 194,000 shareholders at its initial listing. At the same year, the company

established two subsidiaries: Sun Life Asset Management Company Inc., that offered

mutual funds, and Sun Life Financial Plans Inc., which offered pre-need plans. As two

subsidiaries operated in success, the company expanded into provincial areas serving

more people, eventually taking the top spot in premium income in 2011. In 2015, the

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company received the ‘Life Insurance Company of the Year’ award at the 19th Asia

Insurance awards in Singapore, and the distinction of being the ‘Employer of the Year’

given by the Management Association of the Philippines. At present, Sun Life Financial

continues to be one of the top insurance companies in the country with a continuing

endeavor of serving the Filipino people.

B. Vision & Mission Statement

Vision

A community of 5 million Sun Lifers who have ensured their brighter

future with the country’s best financial services company.

Mission

To help clients achieve lifetime financial security.

C. Core Values

clients achieve lifetime financial security. C. Core Values INTEGRITY We are committed to the highest standards
clients achieve lifetime financial security. C. Core Values INTEGRITY We are committed to the highest standards
clients achieve lifetime financial security. C. Core Values INTEGRITY We are committed to the highest standards

INTEGRITY We are committed to the highest standards of business ethics

and good governance.

ENGAGEMENT

We value our diverse talented workforce and encourage

support and reward them for contributing to the full extent of

their potential.

CLIENT FOCUS We provide sound financial solutions for our clients and

always work with their interests in mind.

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3 EXCELLENCE We pursue operational excellence through our dedicated people, our quality products and services, and
3 EXCELLENCE We pursue operational excellence through our dedicated people, our quality products and services, and

EXCELLENCE We pursue operational excellence through our dedicated

people, our quality products and services, and our value-

based risk management.

VALUE We deliver value to the clients and shareholders we serve and

to the communities in which we operate.

D. STRATEGIC GOALS

to the communities in which we operate. D. STRATEGIC GOALS Protect the Core Business Sustaining market
to the communities in which we operate. D. STRATEGIC GOALS Protect the Core Business Sustaining market
to the communities in which we operate. D. STRATEGIC GOALS Protect the Core Business Sustaining market
to the communities in which we operate. D. STRATEGIC GOALS Protect the Core Business Sustaining market

Protect the Core Business

Sustaining market leadership will remain top priority given its

potential for sustained profitability and capacity to fund new

strategic initiatives.

Deliver Financial Targets Healthy Financial position will enable us to explore and

sustain new opportunities.

Achieve 5 Million Sun Lifers

Enables expansion of client base outside the narrowing

ABC1/affluent market.

Maintain Target Operating Metrics

Monitored and addressed to sustain competitive advantages.

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4 E. STRATEGY Diversify the Business Mix An outcome of successful execution of strategic initiatives such

E. STRATEGY

Diversify the Business Mix

An outcome of successful execution of strategic initiatives

such as provincial expansion, growing institutional business

and middle market entry.

Sun Life Financial is a leading international financial services organization

providing a diverse range of insurance, wealth and asset management solutions to

individual and corporate Clients

Client Centric Model

Sun Life Financial aims to provide clients with outstanding values. In line with

this, Sun Life Financial uses its Client Centric Model which drives a strong client

experience among the Four Pillars. This strategy allows the firm to put clients at the

center of everything they do, having client-focused distribution, transforming digitally

the business models and leveraging data and analytic, building a disproportionate

share of top talent, wrapped in a winning culture; and, continuing of track record of

prudent risk and financial discipline.

of top talent, wrapped in a winning culture; and, continuing of track record of prudent risk

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Sun Life’s Client Strategy

Sun Life Financial Company’s Client centric strategy has five key areas of focus,

which the firm are pursuing across each of its four pillars. They define how the firm

compete in its markets, extend their competitive advantages, fulfill our purpose and

support their ambition to be one of the best insurance and asset management companies

globally.

Client

Sun Life’s Clients are at the center of everything the firm do and are focused on

building lasting Client relationships and deepening the value to the firm’s clients by

providing quality products and services that deliver on Purpose. Sun Life Financial believe

this will allow them to maximize the value they are providing their Clients, and lead to

better business outcomes for Sun Life. Sun Life will achieve this through:

o

Making it easier to do business with them

o

Being more proactive in contacting and engaging with our Clients

o

Delivering consistently superior Client service

Distribution Excellence

The Clients will work with high quality distribution partners who put them at the centre

of what they do. They will engage Clients where, when and how they wish, in a

personalized way. Sun Life will continue to invest in its distribution capabilities, through

digital channels and by enabling the firm’s advisors, agents, partners and brokers to

deliver great Client experiences.

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Digital, Data & Analytics

Sun Life Financial Digital, Data & Analytics capabilities are critical, both to delivering

value to firms Clients and for efficiency and effectiveness, while respecting the Clients’

privacy. As consumer preferences evolve and technological advancements enable new

possibilities and services, Sun Life is investing in new capabilities across its businesses

to reach their Clients more effectively, drive efficiencies and explore new business

opportunities. The firm’s focus in these areas will be to:

o

Digitize current processes and interactions

o

Be more proactive, predictive, and personalized with their Clients

o

Build and deploy new digital business models, such as the introduction of

Digital Health Solutions to help Canadians access the latest in digital

capabilities and innovations to take care of their health and well-being

o

Use data to strengthen Client relationships, deliver better products, services

and solutions, and enhance the firm efficiency, effectiveness and profitability

Financial Discipline

Sun Life Financial continued financial and risk management prudence, disciplined

capital allocation and strong execution will support the medium-term financial objectives

and allow them to meet the firm’s aim of top quartile total shareholder returns while

maintaining a preferred risk and capital profile.

Talent and Culture

Delivering on the company’s strategy will require that the company maintain its focus

on attracting, retaining and developing the best talent, while also continuing to evolve

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talent and culture to manage the increasing pace of change. Specifically, Sun Life’s talent

goals are to continue to:

o

Attract a disproportionate share of top talent across the firm geographies,

wrapped in an empowering culture

o

Build on the company high performance culture and support and reward

diverse, talented work force

o

Ensure that the company’s focus on its Clients becomes deeply embedded in

its unique and inclusive culture

o

Remain committed to the highest standards of business ethics and good

governance

Underpinning Strategy is an Enduring Commitment to Sustainability

Sun Life’s focus on advancing sustainability - centered on a vision of building

sustainable, healthier communities for life - is a key initiative for the company and is

essential to the overall business success.

Sun Life Financial Company defines sustainability as taking accountability for its

social, environmental, and economic and governance impacts, risks and opportunities, in

ways that help to ensure long-term ability to deliver value to its Clients, employees,

shareholders and communities.

Sun Life’s company-wide sustainability strategy, approved by the Board of

Directors, focuses on four key areas within which it continue to deepen its commitment

and strengthen its practices:

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Organizational Resilience

Sun Life Financial Company cultivates an organization that is competitive, forward-

thinking, resilient and sustainable for the long term, so we it continue to meet the needs

of its Clients, who are at the centre of all that it do.

Environmental responsibility

Sun Life Financial Company is accountable for the impact of its operations on the

environment, so it consistently taking steps to measure, manage and reduce that impact.

Community wellness

Sun Life Financial Company believes that by actively supporting the communities

in which it live and work, it can help to build a positive environment for their Clients,

employees, advisors and shareholders.

Governance and risk management

Sun Life Financial Company believes that a well-run organization contributes to a

stable operating platform for the company, and positions them to meet its obligations to

stakeholders. Pro-active risk management and an embedded risk culture are essential to

the firms’ long-term success.

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II. Performance of the Firm

A. Level of Resources

Capital

Sun Life’s total capital consists of subordinated debt and other capital instruments,

participating policyholders’ equity and total shareholders’ equity which includes

common shareholders’ equity and preferred shareholders’ equity. As of December 31,

2017, their total capital was $27.1 billion, up from $26.9 billion as of December 31,

2016. The increase in total capital was primarily the result of common shareholders’

net income of $2,205 million and the issuance of $400 million of subordinated

debentures was partially offset by the foreign currency translation impact included in

other comprehensive income (loss) of a loss of $737 million, the payment of $1,066

million of dividends on common shares, and the redemption of $800 million of

subordinated debentures. We strive to achieve an optimal capital structure by

balancing the use of debt and equity financing. The financial leverage ratio for SLF

Inc., which includes the innovative capital instruments and preferred shares issued by

SLF Inc. as part of debt for the purposes of this calculation, decreased to 23.6% as of

December 31, 2017, compared with 25.2% as of December 31, 2016.

Human Resource

In 2017, Sun Life have approximately around 34,000 employees, 112,900 advisors

worldwide. With an average of 1,300 employees, 4,300 financial advisors per service

area and counting, this enables Sun Life to have a wide service area, and fulfill their

mission of reaching the Filipino people in providing financial services. As an integral

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part of the firm, employees are also encouraged to invest in funds and plans to further

protect themselves from accidents, empowered by their own company.

Land

Sun Life Financial has operations of markets in 26 countries worldwide, including

Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines,

Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda.

With wide coverage of financial services from all over the world, the Sun Life way of

service is carried out in various ways, but maintaining a mission of providing lifetime

financial security to clients. With imminent expansion in other countries, Sun Life

continues to promise a better financial security in their areas of service.

Entrepreneurship

Based on findings, there is a ratio of one advisor to 3-5 clients which is the lowest

and one advisor to one whole company which is considered the maximum. This creates

an optimum interaction from advisors to clients, and helps employees to focus their

selves on their clients, taking care of their financial needs in an optimal way. Marketing

strategies are employed in finding clients, reaching into traditional and digital ways.

With current plans of expanding into provincial areas, Sun Life is bound to have more

customers with this plan.

B. Production Process and Techniques

i. Underwriting Process

A process that an insurance company employs in order to assess a potential

client’s eligibility for coverage.

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Underwriters are responsible for evaluating the risks associated with insuring

each and every clients.

Using the risk and exposure data they gather, underwriters determine if the

client can be insured or not.

ii. Underwriting Process Purpose

Underwriting is an absolute necessity in the insurance application process.

Underwriting enables the insurance company to properly classify clients into

appropriate risk classes. It also serves to protect the insurance company from

clients who misrepresent themselves fraudulently. Since clients are classified into

their appropriate risk class, insurance companies are able to keep their premiums

down and provide a majority of their clients with affordable insurance premiums.

iii. The Underwriting Process

insurance premiums . iii. The Underwriting Process Steps: a) Collect Information Information collection is the

Steps:

a) Collect Information

iii. The Underwriting Process Steps: a) Collect Information Information collection is the first step of the

Information collection is the first step of the underwriting

process. Just as banks require credit information before

granting a loan, life and health insurance companies

require information regarding the people we insure. The

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underwriter requires knowledge of several key pieces of information, such as age,

sex, state of health, family history, occupation, hobbies, lifestyle, etc. in order to

properly evaluate the potential clients. This information will vary depending on the

type of insurance policy for which the client is applying. It is possible therefore

that during the underwriting evaluation and application processing, underwriters

may request a personal physician’s report, hospital records or a physical exam,

which may also include blood, urine, ECG or X-ray. Additional requirements may

also be ordered as a result of review of additional piece of information.

b) Analyze/ Evaluate Information

After the required information is gathered, the underwriter begins the process

of analyzing each piece of information.

the process of analyzing each piece of information. 
 The purpose of analyzing the gathered information

The purpose of analyzing the gathered information

is

not to diagnose a disease; that’s a medical matter. The

underwriter is concerned with risk classification which

views disease in terms of the probability of death or

disability.

For example, an individual diagnosed with terminal lung cancer has an almost

100% probability of death in the very near future. There is no realistic way an

insurance company could charge this person a reasonable premium to offset the

risk they present over such a short time horizon, and to try to spread the cost of

this person’s coverage among others with lesser risks would be grossly unfair.

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It is statistically unlikely that a smoker will live as long as a nonsmoker.

Underwriters classify the risks based on statistical information. Thus, a higher

premium is charged for smokers than nonsmokers. It’s only fair. In addition, if the

smoker is overweight and has high blood pressure, the premiums charged will

reflect those additional risks. If the smoker shows additional health problems that

further increase the probability of death or disability, this person may not qualify

for insurance at all. But, if this very same smoker later quits smoking, loses weight

and the blood pressure is reduced, the insurance company will reconsider the

premium because the risk has been reduced.

c) Identify Options

After the information has been analyzed, the underwriter works to identify the

options available for potential insurable clients. The Underwriter makes the

decision on the exact premium to charge. A client can be assigned a standard

premium, which simply means client will be charged a normal premium. Or if the

client has some of the risk factors discussed above, he may be charged a higher

premium.

Finally, if the risk is too high like the individual with terminal cancer he may

be declined for insurance coverage. But in practice, less than 4% of all life

applications are declined and only about 5% require a higher than standard

premium. These options are related to the type of risk class to which potential

clients are assigned.

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Risk

classes

are

composed

of

individuals and companies with similar

characteristics.

These

include the following:

risk

classes

characteristics. These include the following: risk classes  Standard - clients in this class are usually

Standard - clients in this class are usually charged the standard premium

rate quoted in our proposal system for meeting the typical risk requirements.

Rated this class generally represents clients who have an above average

risk. They are usually charged higher rates for premiums than clients in the

standard classes.

Postponed clients are put in the postponed class temporarily until more

information can be obtained, a predetermined time has passed or until

factors that had a bearing on the underwriting decision have changed.

Premium deposit will be refunded after the postpone decision is made.

Declined - clients who are declined are those who pose an uninsurable risk.

Premium deposit will be refunded after the decline decision is made. Once

clients have been declined coverage, they typically have to wait at least 2

years before reapplying for insurance coverage through the company where

they were denied.

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C. Organization Structure

JOSE ISIDRO N. CAMACHO

Chairman, Board of Directors

BOARD OF DIRECTORS

BENEDICTO C. SISON

CEO and Country Head

ALEXANDER S. NARCISO

President and Chief Agency Distribution Officer, Sun Life of

VALERIE N. PAMA President, Sun Life Asset Management Company, Inc. (SLAMCI)
VALERIE N. PAMA

VALERIE N. PAMA

VALERIE N. PAMA President, Sun Life Asset Management Company, Inc. (SLAMCI)
VALERIE N. PAMA President, Sun Life Asset Management Company, Inc. (SLAMCI)
President, Sun Life Asset Management Company, Inc. (SLAMCI)

President, Sun Life Asset Management Company, Inc. (SLAMCI)

President, Sun Life Asset Management Company, Inc. (SLAMCI) RICHARD S. LIM President, Sun Life Grepa Financial,
RICHARD S. LIM President, Sun Life Grepa Financial, Inc.
RICHARD S. LIM President, Sun Life Grepa Financial, Inc.
RICHARD S. LIM

RICHARD S. LIM

President, Sun Life Grepa Financial, Inc.

President, Sun Life Grepa Financial, Inc.

MA.

JOSEFINA A

CASTILLO

Chief Financial

Officer

MARIA

LOURDES D.

LOPA

Chief Marketing

Officer

MA.

KARENINA M.

CASAS

Chief Operating

Officer

MICHAEL D.

ENRIQUEZ

Chief

Investments

Officer

HIYASMIN LEDI

C. MATTISON

Chief Human

Resources

Officer

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Competitive Analysis of Sun Life Financial

SWOT Analysis

 

STRENGTHS

 

WEAKNESSES

1. Ranks on the Forbes Global 2000 list and also Fortune 500 list

1.

The company is highly dependent

on the American market for generating its profits

2.

Has a strong presence in investment

management with strong assets under management operating in a number of countries

2.

Weaker cost structure as compared

to competitors

 

3.

Diversified Organization leading to

3.

It has expertise in life insurance,

distributive focus

asset management and pension

4.

Rising Operating Expenses each

4. The company’s strong and increasing capital strength has made it resilient to the market developments with a strong balance sheet

year.

6.

International operations in more than

 

15 countries

 

OPPORTUNITIES

 

THREATS

1.

The ageing population in the

1.

There is an increase in strictness in

American market poses a huge opportunity for the retirement market.

the regulatory compliance and complexity in the US market leading to increase in costs.

2.

The company has been focusing on

its core businesses in order to avoid

2.

The subprime crisis has resulted in a

any fluctuations in the financial markets affecting it.

low policy interest rate environment.

3.

There is going to be a likely increase

3.

The company finds great opportunity

in competition for capital for the company due to Solvency II adoption.

in the Chinese and Indian insurance

market

 

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PESTEL Analysis

Political

o Trade Protectionist Policies of Trump Administration

Increased

protectionism

policies

impact

global

business

entrants

from

entering the well speculated powers. Sun Life being a Canadian company may find

difficult market conditions for operating in the U.S as new regulations are likely to

be introduced that effect foreign companies. The new administration under Donald

Trump has withdrawn many trade agreements and is expected to make many more

administrative changes in trade deals and partnerships.

o The Strong Native Companies influencing the political powers to stop

them from entering.

The native companies will influence the political powers to stop foreign

companies from entering the country for business. When the local companies

dominating the company cannot enter as an entity instead it enters as a collaborative

company. For example, having a joint venture in Vietnam and acquisition in

Malaysia. There is a lot of competition and with these those two steps, they are

expanding their reach in Asia from five countries to seven and these countries

represents about 70% of the population about 90% of the growth in the firms’

industry in the next decade.

Economical

o Conflict with Native Insurance Companies

Since Sun Life Financial Company is expanding it is causing conflict with

native companies. Many times it is involving a third party to maintain quality of work

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with demand as per location and also collaborating with companies to maintain the

same. But already established individual companies are facing threat due to the

popularity of such global companies.

o Varying Values in Currency Market

Sun Life Financial being a global company, political and economic uncertainty

globally is causing variations with fluctuations in the currency market. The values

keep fluctuating and hence depending on the country’s economic condition and

company’s margins the evaluation varies. By partnering with Sun Life it helps clients

to enhance their business, attract and retain top talent and help covered employees

protect what they love about their lives irrespective of the geographical location but

with costs depending on the currency value in the market. Sun Life is partnering with

Toronto MaRS Discovery District to gain access to a pipeline of health tech and

fintech start-ups.

Socio-Cultural

Population: Growth in the population is a major factor pushing up the

demand. It is also going to exert a special influence on the life insurance market in

other ways. Apart from exerting pressure on demand for goods and services, and

through that, ill effects of uncontrolled growth of population also could spur the

growth of demand. For example, overcrowding in public places of entertainment,

public support, or too many vehicles on the road can result in hazards like

stampedes and pollution, which require covers and still are not sold on a large scale

today. Thus the positive as well as the negative aspects of population growth are

going to spur demand.

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Life style: The peculiar lifestyle of a country or an age also influences the

insurance business. Change therein produces different demands for life insurance.

For e.g. All over the world, family size is shrinking and the fact that in decades to

come, both presents are more frequently likely to work outside the home will mean

that there could be a greater possibility of property loss. Similarly, a larger number

of vehicles on the roads for people commuting to their jobs or business would mean

larger

incidence

of

accidents.

This

will

increase

the

demand

for

life

insurance products. Of course, there is also the other possibility that wherever it is

possible, some people will try to spend a part of their time working at home either

because they would like to be with their families or because they find it more

convenient. Activities like life insurance and financial services are particularly well

suited for such arrangements

Social Benefits: An important social responsibility of the government relates

to spreading it far and wide. In addition, the government attempts to extent life

insurance with certain social obligations in view in both urban and the rural areas

through such means special schemes for the weaker sections, and by tilting of the

life insurance companies’ investments in favor of social developments. The social

changes emerging in the country provide opportunities for insurers to sell financial

services products such as family health care programmed, retirement plans

disability insurance, long-term care for senior citizens and different employee benefit

plans. The population

in

the

age group 15-55 is usually regarded

as the

insurable population, since this can be considered as the main “active” age group,

and beyond this range life risk may be considered to be not worth insuring.

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Technological

Internet as an intermediary in the current Indian market customer is not aware

about the intrinsic value of insurance. He thinks of insurance only in the mount

of March as a tax saving measure. The security provide by an insurance cover is

rarely thought about. In such a scenario Internet can be an effective medium for

educating the consumers about insurance. It serves as a single window for

disseminating product, process and procedural information to the consumers.

Product development and target marketing through the Internet: with

increase in the number of insurance companies there will be a need for market

segmentation and subsequently product designed for each of them. In such a

scenario

Internet

can be

an

effective

channel

for

pushing

product

specific

information to a particular market segment. Consumer feedback about a particular

product as well as suggestions for different types or covers can also be generated

through the Internet.

Maintaining the database

The most important factor that is affecting the insurance industry is the

marinating the database of the customers. The insurance industry having a huge list

of the customers. In order to maintain it in manual format it is really the work of

stupidity. With the change in time the computers has taken the work of this things.

Thus with the development of the technology it has becoming possible to maintain

such huge

database very easily. A person can switch over to the computer and

get the details of the customer very easily. Thus maintaining the database has really

become easy due to the development in technology.

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Legal

The

Financial

Services

industry follows

strict

laws

regarding

consumer laws, and trade structures to confirm frameworks within the industry. Such

structures are required for customers in the allocated country and for international

users.

The Sun Life Financial industry globally is impacted by several laws. It is also

a large employer and is affected by the labor laws. Legal risks are immense because

oversight and regulation are very high in this sector. In US alone, several laws have

been introduced to regulate this sector of the industry. Since the Federal Reserve

act of 1913, the Glass Steagall Act and the Dodd Frank several laws have been

introduced and several agencies founded to oversee and ensure compliance.

Customer concerns and social responsibility have also made the government

introduce several laws. Financial Services is a heavily regulated area where

compliance requires a lot of focus and also spending.

Environmental

Sustainability and environment friendliness has become important for the

banking

&

financial

services

sector

too

just

like

other

businesses.

Energy

management and other environmental concerns are being addressed by companies

globally. The environment and technology go very much hand in hand here, as

financial services companies provide ‘go paperless’ options to customers to reduce

their carbon footprint. Many services can now be reached at the click of a button

reducing the need for administration and making the banking process more efficient.

Financial Services and Banking companies also publish their yearly environmental

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reports highlighting their critical achievements over the year in this area. It creates

a positive image and also reduces costs in several operational areas.

Porter’s Five Forces Analysis.

Porter Five Forces Analysis is a strategic management tool to analyze

industry and understand underlying levers of profitability in a given industry. Sun Life

Financial Company managers can use Porter Five Forces to understand how the

five competitive forces influence profitability and develop a strategy for enhancing

the firm’s competitive advantage and long term profitability in Life Insurance

industry.

Threats of New Entrants - High

New entrants in Life Insurance brings innovation, new ways of doing things

and put pressure on Sun Life through lower pricing strategy, reducing costs, and

providing new value propositions to the customers. Sun Life. has to manage all

these challenges and build effective barriers to safeguard its competitive edge.

How Sun Life Financial Company can tackle the Threats of New Entrants.

o

By innovating new products and services. New products not only brings new

customers to the fold but also give old customer a reason to buy Sun Life‘s

products.

o

By building economies of scale so that it can lower the fixed cost per unit.

o

Building capacities and spending money on research and development. New

entrants are less likely to enter a dynamic industry where the established

players such as Sun Life Financial, keep defining the standards regularly. It

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significantly reduces the window of extraordinary profits for the new firms thus

discourage new players in the industry

Bargaining Power of Suppliers Medium

All most all the companies in the Life Insurance industry buy their raw

material from numerous suppliers. Suppliers in dominant position can decrease the

margins Sun Life Financial can earn in the market. Powerful suppliers in financial

sector use their negotiating power to extract higher prices from the firms in Life

Insurance field. The overall impact of higher supplier bargaining power is that it

lowers the overall profitability of Life Insurance.

How Sun Life Financial. can tackle Bargaining Power of the Suppliers

o

By building efficient supply chain with multiple suppliers.

 

o

By experimenting with product designs using different materials so that if the

prices go up of one raw material then company can shift to another.

 

o

Developing dedicated suppliers whose business depends upon the firm. One of

the lessons Sun Life Financial can learn from Wal-Mart and Nike is how these

companies

developed

third

party

manufacturers

whose

business

solely

depends

on

them

thus

creating

a

scenario

where

these

third

party

manufacturers have significantly less bargaining power compare to Wal-Mart

and Nike.

Bargaining Power of Buyers - High

 

Buyers are often a demanding lot. They want to buy the best offerings

available by paying the minimum price as possible. This put pressure on Sun Life

profitability in the long run. The smaller and more powerful the customer base is of

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Sun Life Financial the higher the bargaining power of the customers and higher

their ability to seek increasing discounts and offers.

How Sun Life Financial. can tackle the Bargaining Power of Buyers

o

By building a large base of customers. This will be helpful in two ways. It will

reduce the bargaining power of the buyers plus it will provide an opportunity to

the firm to streamline its sales and production process.

o

By rapidly innovating new products. Customers often seek discounts and

offerings on established products so if Sun Life keep on coming up with new

products then it can limit the bargaining power of buyers.

o

New products will also reduce the defection of existing customers of the firm to

its competitors.

Threats of Substitute Products or Services - Low

There is no real threat of substitutes for the insurance industry When a new

product or service meets a similar customer needs in different ways, industry

profitability suffers.

How Sun Life Financial can tackle the Treat of Substitute Products / Services

o

By continually being client and service oriented rather than just product oriented.

o

By understanding the core need of the customer rather than what the customer

is buying.

o

By increasing the switching cost for the customers.

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Rivalry among the Existing Competitors High

If the rivalry among the existing players in an industry is intense then it will

drive down prices and decrease the overall profitability of the industry. Sun Life

operates in a very competitive Life Insurance industry. This competition does take

toll on the overall long term profitability of the organization.

How Sun Life Financial can tackle Intense Rivalry among the Existing

Competitors in Life Insurance industry.

o

By building a sustainable differentiation

o

Collaborating with competitors to increase the market size rather than just

competing for small market.

SPACE Analysis

The chart shows that Sun Life Financial Industry is competitive in nature,

because it falls out on the quadrant of a competitive strategy use by the industry.

CA

FS

6 5 4 3 2 1 0 -6 -5 -4 -3 -2 -1 0 1
6
5
4
3
2
1
0
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
-1
-2
-3
-4
-5
-6

ES

IS

Financial

3.6

Strength (FS)

Competitive

-3.67

Advantage (CA)

Environmental

-3.89

Stability (ES)

Industry Strength (IS)

3.83

X-Axis

Y-Axis

.16

-.29

26

D. Pricing Strategy Employed

- Pricing depends on the type of insurance that you will acquire.

Types & Sample Computations

i) Traditional Insurance


 Types & Sample Computations i) Traditional Insurance Basic Plan: Sun Start-Up A 10-pay, non-participating life

Basic Plan:

Sun Start-Up A 10-pay, non-participating life insurance product maturing at the end of 10

years.

Maturity benefit is equal to 50% return of premium (ROP), where ROP

benefit is based on the original annual premium. Original annual premium is the

annual premium of the basic policy at policy effective date, excluding any rider

premium, extra premium and/or modal loadings.

Living Benefit Rider

This is a benefit that provides an advance payment of up to 60% of the basic

Face Amount, subject to the prior deduction of any outstanding advances (loans)

with interest, if

the life insured is diagnosed to be terminally ill with a

life

expectancy of 12 months or less. The sum of all Living Benefit Amounts payable

on all Sun Life policies of the life insured shall not exceed Ps. 2 Million. Interest

27

is charged on advances, including the Living Benefit amount paid, at a specified

rate of interest as declared by the Company.

Guaranteed Cash Value and Death Benefit Illustration

Guaranteed Cash Value and Death Benefit Illustration The guaranteed cash value on the 10th policy year

The guaranteed cash value on the 10th policy year is the Return of Premiums on

Maturity.

ii) Variable Universal Life (VUL)

The guaranteed cash value on the 10th policy year is the Return of Premiums on Maturity.

28

Basic Plan:

Sun FlexiLink

A variable life insurance product payable until age 88. The living benefit is

equal to the fund value, which is partially or fully withdrawable from the policy's

share in the separate account(s). The death benefit is the higher of the sum of

the face amount and the fund value or the minimum death benefit. The minimum

death benefit is equal to 500% of the regular premium plus 125% of each paid

excess premium, if any, less 125% of each partial withdrawal, if any. No other

benefits are payable under this product.

Investment Fund Descriptions

Balanced Fund - The fund is designed to provide optimum returns through

investment in a mix of government and domestic corporate debt and locally-

listed equity securities.

Bond Fund- The fund is designed to stay invested only in high-quality fixed

income instruments that are classified as below average risk.

Equity Fund - The fund is designed to produce long term capital appreciation

through investment in high quality stocks that are diversified across sectors.

Money Market Fund (available only for fund switching/transfers) - The fund

is designed to ensure capital protection and provide adequate liquidity while

maximizing yields on short-term placements.

My Future Fund - The fund is a target date fund that will invest primarily in

high-quality stocks and a mix of government and domestic corporate debt in

29

accordance with an asset allocation strategy that will become increasingly

conservative as the maturity of the fund approaches.

Growth PLUS Fund- The fund is designed mainly to generate long-term

capital appreciation through investment in high-quality equity and equity-linked

securities, diversified across sectors, which distribute periodic dividends and

provide sustainable dividend yields.

Index Fund -

The Fund is designed mainly to generate long-term capital

appreciation

through

investment

in

high-quality

equities

comprised

of

constituents of the Philippine Stock Exchange Index (PSEi).

Captains Fund -The Fund is designed mainly to generate long-term capital

appreciation primarily through investment in equity and equity-linked securities

diversified across sectors.

Opportunity Tracker Fund - The Fund is designed to provide optimum returns

consisting of current income and capital growth through investment in a mix of

fixed-income and equity instruments.

Illustration of Benefits – All Chosen Funds

Note: The values illustrated below are not guaranteed. The investment returns

used are for illustrative purposes and are not based on past performance with

respect to the fund where your policy is linked. The returns are likely to change

during the investment period. Also, the assumed returns do not represent the

upper and lower limits of the actual return that may be realized. Values are

calculated assuming the fund is earning 4%*, 8%* and 10%*. It is assumed that

30

the mode of payment is annual. If mode of payment is other than annual, values

shown may change.

of payment is annual. If mode of payment is other than annual, values shown may change.

Illustration of Rider Premiums

of payment is annual. If mode of payment is other than annual, values shown may change.

31

E. Business Relations with other Business.

In the growing global business environment, relationships between firms are

strengthened to be able to cope up with the innovations in business. Although firms

under the same industry are competing against one another to gain an incomparable

market share, inter-industry relations between firms are growing to be a great solution

to the global business environment. As Sun Life Financial Philippines is one of the

leading insurance companies in the Philippines, the company is geared towards to lead

the industry in the Philippine market. In order to lead the competition, the firm is

partnering up with Lazada Philippines in offering insurance plans to the Filipino people.

in offering insurance plans to the Filipino people. Sun Life Financial is offering the “Family Armor”

Sun Life Financial is offering the “Family Armor” plan exclusively to registered Lazada

members. This partnership would lead to increase in market share of both companies when

registered Lazada members, who buy products from Lazada, will avail of the plan from Sun

Life. This will help the target market of both businesses to have their own family protection

from any accidents and any other incidental expenses.

32

F. Financial Viability

1. Financial Ratios

In a business sense, analyzing the company’s current financial position and

its performance in comparison of the past years and identify the company’s

strength and weakness as well.

A. Liquidity Ratio

Measuring the liquidity ratio allows Sun Life Financial Insurance Company

calculates the current assets against its outstanding liabilities. A high ratio signifies

that the company has low risk of defaulting payment.

a) Current Ratio

Formula

=

Current Assets

 

Current Liabilities

2017

2016

 

=

$146,139,000.00

$142,350,000.00

 

$139,749,000.00

$138,703,000.00

 

=

1.05

1.03

The Current Ratio for 2017 is 1.03 to 1. This means that for 2016, the

company has $1.03 of current assets that can be converted to cash to pay

every dollar of current liability. On the other hand, for 2017, the company

has $1.05 of current assets to cover every dollar of current liability that will

fall due.

33

For 2017, the current ratio increased signifying more liquidity for the

company for the period.

b) Quick Ratio

Formula

=

Cash + Short Term Investment

 
 

Current Liabilities

 

2017

2016

 

=

$

8,890,000.00

$

8,642,000.00

$139,749,000.00

$138,703,000.00

0.064

0.062

The quick ratio of Sun Life Financial Insurance is 0.062 for 2016 and 0.064

for 2017. This means that the company has $0.062 of quick assets for

every $1 of current liability and 0.064 for 2017.

Note: Cash equivalents are included.

c) Working Capital

Formula

=

Current Assets

-

Current Liabilities

2016

=

$142,350,000.00

-

$138,703,000.00

 

=

$

3,647,000.00

2017

=

$146,139,000.00

-

$139,749,000.00

 

=

$

6,390,000.00

The working capital of Sun life financial Insurance Company is $3.647

million and $6.390 million in 2017. This means that for the year 2017,

the company is more liquid in meeting its short-term obligations.

34

B. Solvency Ratio

Measuring Solvency ratio allows Company to measure its ability to pay its

maturing long-terms obligations while sustaining its operation indefinitely.

a) Debt Ratio

Formula

=

Total Liabilities

 

Total Assets

2017

2016

 

=

$ 246,141,000.00

$

235,870,000.00

 

$ 269,112,000.00

$

258,238,000.00

 

=

91.5%

91.3%

From 2016 to 2017, Sun Life Financial Insurance Company’ assets are

heavily funded by the creditors. In 2016 91.3 % of the assets were finance

by the creditors and in 2017, 91.5% which is a step higher is funded by

the creditors. The company is considered to be highly leveraged and this

situation is risky for the company as the creditors owned most of the

assets.

b) Equity Ratio

Formula

=

Total Equity

 

Total Assets

2017

2016

=

$

22,971,000.00

$

22,368,000.00

$ 269,112,000.00

$ 258,238,000.00

=

8.5%

8.7%

35

Sun Life Financial Insurance Company’s equity ratio is 8.7% for 2016.

This slightly went down to 8.5% in 2017. This rates means that in 2016 &

2017 the owner only owns 8.7% and 8.5% respectively of the company’s

asset. This is way below the optimal fair ratio and is severely low.

c) Debt to Equity ratio

Formula

=

Total Liabilities

 

Total equity

2017

2016

 

=

$ 246,141,000.00

$ 235,870,000.00

 

$

22,971,000.00

$

22,386,000.00

 

=

10.7%

10.5%

Throughout the years, Sun life Financial Insurance Company’s debt to

equity ratio increased. In 2016, debt equity ratio was 10.5, which means

that for every $1 dollar funded by the owner in the business assets, $10.5

was funded by the creditors. In 2017, debt equity ratio was 10.7 which

means that for every $1 dollar funded by the owner in the business

assets, 10.7 was funded by the creditors.

d) Working Capital

Formula

=

Income Before Interest & Taxes

 

Total equity

 
 

2017

2016

 

=

$

2,789,000.00

$

3,445,000.00

 

$

302,000.00

$

619,000.00

36

=

9.2

5.6

Sun Life Financial Insurance Company’s Interest is 5.6 times of its

income before interest and taxes in 2016 and 9.2 times in 2017. The

increase in number of times may due to the decreasing interest payments

from large amounts of loans. Meaning, the company’s operating income

can cover interest expense and is not struggling to its interest from loans.

C. Profitability Ratio

Assessing Profitability ratio allows Sun Life Financial Insurance Company

measure its overall efficiency and performance based on its ability to generate

profit from operations relative to available assets and resources.

a) Operating Profit Margin

Formula

=

Operating Income

 
 

Net Revenue

2017

2016

 

=

$ 2,789,000.00

$ 3,445,000.00

 

$29,334,000.00

$28,573,000.00

 

=

9.5%

12.1%

The Operating profit margin has obviously a downward trend. From 12.1%

in 2016 it went down to 9.5%. This means that Sun Life Insurance

Company has a hard time managing its expenses.

37

b) Net Profit Margin

Net Revenue

 

2017

2016

=

$

2,149,000.00

$

2,485,000.00

$ 29,334,000.00

$ 28,573,000.00

=

7.3%

8.7%

The Net profit margin have been decreasing from 8.7% in 2016 to 7.3% in

2017. It means that the management lacks and need to exert more effort on

increasing its revenue and cut on expenses to improve net income for future

operation. The firm needs to be more effective on converting its revenue

into profits available for stockholders.

c) Premium Growth Ratio

Formula

=

Gross Premium 2

-

Gross Premium 1

x 100

 

Gross Premium 1

 
 

=

$ 19,838,000.00

-

$ 19,427,000.00

x 100

 

$ 19,427,000.00

 
 

=

$ 41,100,000.00

 

$ 19,427,000.00

 

=

2.12%

38

Sun Life Insurance for 2017 has 2.12% of premium growth which indicates

growth in the business undertaken by the insurance company. A growth

indicates that clients entrust the firm more for covering their risk.

d) Risk Retention Ratio

Formula

=

=

=

Net Premium

Gross Premium

2017

$ 15,281,000.00

$ 19,838,000.00

77%

2016

$ 15,048,000.00

$ 19,427,000.00

77.5%

Sun Life Financial Insurance Company’s risk retention ratio slightly went

down from 77.5 % of level of risk retained by the insurer in 2016 to 77% of

level of risk retained by the insurer in 2017. The firm clearly takes a huge

responsibility in the risk it faces rather than transferring or avoiding.

2. Horizontal & Vertical Analysis

Being able to analyze and interpret the whole data encoded in the

financial statements is a very important skill rather than just looking at it. With this

analysis, firm will be to understand, analyze and interpret the relationship of each

and every part and will also clearly indicate the transactions and situation that

happened in a period of time. This would also help the management to make

actions and solutions regarding important matters that the firm faces.

Sun Life Financial Insurance Company

Consolidated Statement of Financial Position As of December 31 2017

39

 

Incr.

Dec.

 

2017

2016

Amt.

%

Assets

Cash, cash equivalents and short-term securities (Note 5)

$

8,890

$

8,642

248

2.9

Debt securities (Notes 5 and 6)

72,619

71,887

732

1

Equity securities (Notes 5 and 6)

6,020

5,774

246

4.3

Mortgages and loans (Notes 5 and 6)

42,805

40,775

2,030

5

Derivative assets (Notes 5 and 6)

1,478

1,608

-130

-8

Other invested assets (Note 5)

4,154

3,931

223

5.7

Policy loans (Note 5)

3,106

3,141

-35

-1.1

Investment properties (Note 5)

7,067

6,592

475

7.2

Invested assets

146,139

142,350

3,789

2.7

Other assets (Note 8)

4,408

5,109

-701

-13.7

Reinsurance assets (Notes 10 and 11)

4,028

5,144

-1,116

-21.7

Deferred tax assets (Note 20)

1,295

1,448

-153

-10.6

Intangible assets (Note 9)

1,667

1,703

-36

-2.1

Goodwill (Note 9)

5,183

5,317

-134

-2.5

Total general fund assets Investments for account of segregated fund holders (Note

22)

 

162,720

161,071

1,649

1

106,392

97,167

9,225

9.5

Total assets

$

269,112

$

258,238

10,874

4.2

Liabilities and equity

Liabilities

Insurance contract liabilities (Note 10)

$

117,785

$

115,057

2,728

2.4

Investment contract liabilities (Note 10)

3,082

2,913

169

5.8

Derivative liabilities (Notes 5 and 6)

1,756

2,512

-756

-30

Deferred tax liabilities (Note 20)

403

687

-284

-41.3

Other liabilities (Note 12)

11,987

12,399

-412

-3.3

Senior debentures (Note 13)

1,299

1,299

0

0

Subordinated debt (Note 14)

3,437

3,836

-399

-10.4

Total general fund liabilities Insurance contracts for account of segregated fund holders (Note 22) Investment contracts for account of segregated fund holders (Note 22)

 

139,749

138,703

1,046

0.8

99,121

90,388

8,733

9.66

7,271

6,779

492

7.3

Total liabilities

$

246,141

$

235,870

10,271

4.4

Equity

Issued share capital and contributed surplus

$

10,911

$

10,943

-32

-0.3

Shareholders’ retained earnings and accumulated other comprehensive income

11,410

11,013

397

3.6

Total shareholders’ equity

22,321

21,956

365

1.7

Participating policyholders’ equity

650

412

238

57.8

Total equity

$

22,971

$

22,368

603

2.7

Total liabilities and equity

$

269,112

$

258238

10,874

4.2

Sun Life Financial Insurance Company

Consolidated Statement of Financial Position As of December 31 2017

40

 

2017

%

2016

%

Assets

Cash, cash equivalents and short-term securities (Note 5)

$

8,890

3

$

8,642

3

Debt securities (Notes 5 and 6)

72,619

27

71,887

28

Equity securities (Notes 5 and 6)

6,020

2

5,774

2

Mortgages and loans (Notes 5 and 6)

42,805

16

40,775

16

Derivative assets (Notes 5 and 6)

1,478

1

1,608

1

Other invested assets (Note 5)

4,154

2

3,931

2

Policy loans (Note 5)

3,106

1

3,141

1

Investment properties (Note 5)

7,067

3

6,592

3

Invested assets

146,139

54

142,350

55

Other assets (Note 8)

4,408

2

5,109

2

Reinsurance assets (Notes 10 and 11)

4,028

1

5,144

2

Deferred tax assets (Note 20)

1,295

0

1,448

1

Intangible assets (Note 9)

1,667

1

1,703

1

Goodwill (Note 9)

5,183

2

5,317

2

Total general fund assets

162,720

60

161,071

62

Investments for account of segregated fund holders

106,392

40

97,167

38

Total assets

$

269,112

100

$

258,238

100

Liabilities and equity

Liabilities

Insurance contract liabilities (Note 10)

$

117,785

44

$

115,057

45

Investment contract liabilities (Note 10)

3,082

1

2,913

1

Derivative liabilities (Notes 5 and 6)

1,756

1

2,512

1

Deferred tax liabilities (Note 20)

403

0

687

0

Other liabilities (Note 12)

11,987

4

12,399

5

Senior debentures (Note 13)

1,299

0

1,299

1

Subordinated debt (Note 14)

3,437

1

3,836

1

Total general fund liabilities Insurance contracts for account of segregated fund holders (Note 22) Investment contracts for account of segregated fund holders (Note 22)

 

139,749

52

138,703

54

99,121

37

90,388

35

7,271

3

6,779

3

Total liabilities

$

246,141

91

$

235,870

91

Equity

Issued share capital and contributed surplus

$

10,911

4

$

10,943

4

Shareholders’ retained earnings and accumulated other comprehensive income

11,410

4

11,013

4

Total shareholders’ equity

22,321

8

21,956

9

Participating policyholders’ equity

650

0

412

0

Total equity

$

22,971

9

$

22,368

9

Total liabilities and equity

$

269,112

100

$

258238

100

41

G. Industry Concentration Ratio

The table below indicates the percentage of the market shares in the industry

of Insurance. Manulife Financial Corporation has the largest percentage of market

share with the value of 39.96%, meanwhile the Great-West Lifeco Inc has 32.21%

market share. The lowest percentage of market share was the Industrielle Alliance,

Assurance et Services Financiers Inc. with 7.74% market share and the Sun Life

Financial has 20.10% market share, a though competition for Sun Life in the

Insurance industry.

Firm

Sales

Market Share

Sun Life Financial

$ 23,367.25

20.10%

Industrielle Alliance, Assurance et Services Financiers Inc.

8,999.9

7.74%

Great West Lifeco Inc

37,446.23

32.21%

Manulife Financial Corporation

46,459.67

39.96%

TOTAL

$ 116,273.05

100%

45 Market Share 40 35 30 25 20 15 10 5 Market Share 0 Sun
45
Market Share
40
35
30
25
20
15
10
5
Market Share
0
Sun Life Financial
IAASF Inc.
Great-West Lifeco Inc.
Manulife

42

H. Corporate Social Responsibility

Sun Life an insurance company that provide benefits for its customers. The

people behind this company aims not just to earn profits but also to give in return

and help individuals on the society who are in need, who does not have the

capability to study or attend to its health issues and etc

Based on Sun Life

Foundation their goal was to “construct a brighter world”, promising like a sun that

gives hope to another day to come, by sharing to other people. Supporting charities

that advocate the similar reliance, which is a good foundation to continue and

spread the brighter future in the world. Their four pillars are education, health,

environment, as well as arts and culture. Concern with the responsibility of how

will a human live for the next hundred years and, what things was supposed to be

made, or what actions are considered to be done to make good changes not just

within the community but in the whole world. According to the Public Accountability

Statement (2017) of Sun Life, the continuance of doing humanitarian activities

enable them to help millions of people (clients, families and individuals) that gives

satisfaction for them; working with Diabetes™ in terms of health and Making the

Arts More Accessible™ program that advocates the arts and culture.

EDUCATION The need of a child to learn and his/her right to have an education - Sun

Life gives light to every youth who has lost years, hope for the brighter world

because of the burdens and challenges upon them. During the year 2013, Yolanda

one of the strongest typhoon who destroyed almost the entire province of Leyte

and Samar in Visayas and, thousands of people died, and thousands of people

43

were losing their hope and dreams as the cyclone takes almost everything from

them. For children’s, who dreamed and has a bright outlook in life, get dull because

of the tragedy, but as a company whose purpose was to give back to people who

needed help, Sun Life gives another hope to the children’s, to continue their

dreams, to see the light despite of darkness. Rebuilding the schools that wreck by

the typhoon- the aspirations of the students awaken, Sun Life aims to touch people

lives, to share the light of the future, after the reconstruction of the classrooms

some people donated foods and new school supplies. Sun Life Financial

Philippines Foundation promotes the needs of the youth to have an education,

that’s why Sun Life Foundation increase their scholarships to be able to help more

young Filipinos especially those who wants to take critical course like mathematics,

statistics,

biology,

agriculture

and

chemistry.

Currently

there

are

four

schools/universities that is covered by the scholarship program of the Sun Life

Foundation - University of the Philippines in Diliman, University of San Carlos in

Cebu, Central Mindanao University and the Mindanao State University. The

scholars are said to be receive the benefits of a 100% tuition fees per semester,

as well as book allowances per semester, worth P5, 000 and a P7, 000 monthly

allowance for everyday expenses. Sun Life also lend a hand to those projects that

will construct a new hope for some unprivileged children to know the value of life

on their new classrooms.

HEALTH

Recently Sun Life, partner up with Diabetes Canada which their aim was to

raise awareness for having diabetes especially the type 2 of diabetes, can be

44

prevented or can be worsen if neglected. For the celebration of the national

Diabetes Awareness Campaign every month of November. Sun Life also supports

other campaigns about health by donating and being part of it. Sun Life marked

November 14 year 2017 as a "World Diabetes Day" by holding events that raise

awareness and help their clients to live a healthier life by being aware of the

reasons on how an individual acquire a diabetes. There were foundations or

charities that an industry supports, foundations that generate funds through the

help of other locals - As life is a necessary thing in the world, Sun Life values and

do medical missions, free check-ups for eye, dental, and other more that benefits

the unfortunate people, or those who lives far from the civilization. Sun Life also

improves the health issues within the work place, in an internal strategy, where

there are sub-elements that generates a mandated standard within the work. And

there were strategy that benefits not just the health of an individual but as a whole;

a program that won't just be focusing on a specific asset, but as well as the results

generate a good outcome.

Together, on the 10th anniversary of Sun Life, collaboration with Unilab

Foundation in promoting health among people especially the empowered and

equipped youth to help other people. For a more active community and individuals,

the foundation sponsored to create a safe space for thousands of household in

Marikina City, in Philippines, the project would be building a park for wellness

activities.

45

ENVIRONMENT

Being aware of the things that is happening around us, one of the major

problems and always the issue when it comes to environment - pollutions (water,

air, and land). Because of the abuse of humans on consuming the resources, some

neglect their responsibilities as a consumer.

Sun Life provides boats for fisherman in Visayas, where it is there primary

source of their income. Some of these individuals has the discipline to keep the

sea as is before they come. And Sun Life Foundation also participates and support

the tree planting events. In order to have a sustainable community, being

responsible of our actions, saves the dying nature. Only if people unite together to

a common goal on preserving and taking care of the environment.

ARTS AND CULTURE

Every arts and culture are loaded of a rich history, every details is a

treasure. Year 2017, as Sun Life welcome another prosperous chapter on their

life's by sharing music to everyone. Sun Life Financial Musical Instrument Lending

Library in Canada for its 150th celebration, it became successful and they establish

three more musical instruments lending library. Anyone are allowed to borrow as

long as you have a valid library card, free of charges. The main purpose was to

put it on the hands of individuals, to play a song of their life. Due to the abundant

creativity of individuals, each work of art is a treasure that should be valued and

appreciated.

46

Analysis of the Implementation of Other Unique Programs of the Firm

i. Unique Programs Implemented

Unique Programs of the Firm i. Unique Programs Implemented The Prosperity Card is a gift card
Unique Programs of the Firm i. Unique Programs Implemented The Prosperity Card is a gift card

The Prosperity Card is a gift card which can be

used to

invest in any of the peso-denominated

mutual funds (collectively called as the Sun Life

Prosperity

Funds)

offered

by

Sun

Life

Asset

Management Company, Inc. (SLAMCI).

Auto-Invest is an investment program that

enables existing clients to add monthly or quarterly

investments

to

their

peso-denominated

Sun

Life

Prosperity

Funds

automatically

from

their

bank

accounts from Banco de Oro, Bank of the Philippines

Islands, Metro bank, and Security Bank.

of the Philippines Islands, Metro bank, and Security Bank. Sun RISE or Regular Investments Simplified for

Sun

RISE

or

Regular

Investments

Simplified for Employees is a workplace savings

plan for employees. It is a group investment program

that allows members to invest in peso-dominated

Sun Life Prosperity Funds for as low as PHP300.

This can be done though monthly contributions from

their salaries.

47

47 ii. Objective of Implementation Sun Synergy Recharged is an automatic premium payment facility for two

ii. Objective of Implementation

Sun Synergy Recharged is an automatic

premium payment facility for two complementary

products: mutual funds (for growth in investments)

and insurance policies (for protection). It now comes

with enhanced features to help you achieve your

financial goals conveniently, no matter what stage you

are in.

UNIQUE PROGRAMS

OBJECTIVES

Prosperity Card

The Prosperity Card’s objective is to establish a starter fund of one, or to gift it to anyone who they want to have a starter fund. This enables the Filipino people to invest in funds of Sun Life.

Auto-Invest

The Auto-Invest program is establish to help existing clients by investing in funds on a regular basis on top of their peso-dominated Sun Life Prosperity Funds. Investments are automatically deducted from their bank accounts to stick with their objective.

Sun RISE

The Sun RISE program helps a company’s employees to invest in Sun Life Prosperity Funds for a low amount. Even if the employee reigns from the company, the employee’s investment may continue, being accessible to the members under the program.

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Sun Synergy Recharged

The Sun Synergy Recharged is a program facility that allows the automatic payment of insurance premiums from invested mutual funds, designed to help clients who seek investment return and hassle-free payments.

iii. Benefits or change derived

UNIQUE PROGRAMS

BENEFITS

Clients who avail of this program will be able to

jumpstart an investment in peso-dominated mutual

funds of their own, or to give the opportunity of

investing to people they know.

Prosperity Card

Auto-Invest

Clients who enroll under this program will be

instilled with discipline as it allows clients to invest

on regular basis and benefit from peso cost

averaging.

Sun RISE

Clients who enroll under this program will enjoy

convenience, affordability, increased earning

potential, portability, and professional fund

management. Investments come from the

employees payroll account, with an affordable

amount of PHP 300/month, helps earn more as

clients are investing in mutual funds, managed by

investment professionals, and in case of resignation

or retirement, investments can still continue.

Sun Synergy Recharged

Clients who enroll under this program will enjoy a

convenient way of paying for Sun Life policies,

promotes maximum insurance protection, and have

an opportunity to participate in higher yielding

investments.

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IV. Firm’s Response to Government-Mandated Programs & Policies

i. Government-Mandated Program and Policies

a.

Incidents of Suspected Fraud or Similar Illegal Acts (FAM Section 4101)

This policy ratifies the zero tolerance policy of the Government with

regard to fraud and similar illegal actions. It also outlines the emphasis of

the Government on an ethical and positive working environment and on the

expectation of adequate ministry systems and controls. The policy is

available in the Finance and Management Manual (FAM).

b.

Republic Act No. 3019, as amended, or the Anti-Graft and Corrupt

Practices Act (ACPA)

It is the Philippine Government's policy, in accordance with the

principle that a public office is a public trust, to repress certain acts of public

officials and private persons which constitute grafting or corrupt practices or

which may lead to them.

c.

Republic Act No. 6713. Code of Conduct and Ethical Standards for

Public Officials and Employees

An act establishing a code of conduct and ethical standards for public

officials and employees, which upholds the long- established principle of

public office as a public trust, grants incentives and rewards for exemplary

service, lists prohibited acts and transactions and imposes penalties for

violations thereof and for other purposes.

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d. Federal Privacy Act 1988

Personal information can in some cases allow an individual to be

identified. It includes information such as the name, address, financial

information, marital status or accounting details of a person

ii. Its effect on the firm

a. Deterring Fraud

Fraud is a dishonest act or omission aimed at deceiving or misleading

personal or business gains. It may be committed by Sun Life- associated

persons, such as employees and consultants, or by third parties, such as

sellers or customers. Some of the illegals acts include forgery of a

document,

theft

of

cash

and

confidential information.

other property,

b. Rejecting Corruption and Bribery

bribes

and

misuse of

The company Sun Life is condemned to the direct contravention of anti-

corruption and anti- bribery laws in the countries where it operates. They

also prohibit direct or indirect use by employees, agents or other parties

acting on behalf of Sun Life of bribery, kickbacks, wages or other corrupt

practices. With that said, they would have good recognition in its suppliers,

potential customers, and government representatives.

c. Right of Creditors

The principal creditors of Sun Life are its suppliers. At Sun Life, they

want to do business with suppliers that share their valuesintegrity,

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commitment, customer focus, excellence, value and innovationand that

meet the business needs. It also states that their Strategic Sourcing team

identifies and evaluates potential suppliers, then negotiates with them and

contracts with them to obtain high- quality products and services efficiently

and cost- effectively. We evaluate the suppliers for the products and

services they provide and their demonstrated ability to meet our business

needs.

d. Respecting Corruption and Confidentiality

Respect for the privacy of the Sun Life Company customers and

employees is essential for maintaining its ethical reputation and for

establishing strong business relations. One of their major responsibilities is

protecting confidential information against theft, loss, unauthorized access,

disclosure, destruction or misuse, whether it be about Sun Life or about their

customers.

iii. Firm response on it / Solution from problems arising from it

a. Sun Life tolerates no fraud, its stakeholders expect all of Sun Life

community to act honestly and integrally. None of us should be involved in

any kind of dishonest or fraudulent behavior that might affect Sun Life, our

customers or our colleagues.

b. Sun Life have similar anti- corruption law which operated by many

countries. These laws generally prohibit companies from giving or offering

something of value to a government official or someone else to influence

a decision improperly, to assist the company in doing business or to obtain

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an inappropriate business benefit. Hence, no payments or transfers of

anything of worth ought to run to brass or representatives while not

previous review and authorization

c. Sun Life submits its audited financial statements and annual statement to

the Securities and Exchange Commission and the Insurance Commission.

As these become public documents once they have been submitted to the

regulators, the company's creditors also have access to these reports to

inform them of the financial situation. The company also provides its

creditors with prompt and accurate financial reports. In addition, it is Sun

Life’s policy to protect the rights of its creditors by maintaining the

company’s good credit standing at all times. The Company strictly

observes contractual obligations, and regard fair and truthful disclosure

and transparency of financial records and dealings of utmost importance

to assure creditors of the Company’s continued credit worthiness.

d. Sun

Life

has

incredible

arrangement

of

data

about

our

clients,

representatives, and other people who create associations with us, and

have a commitment to restrict the accumulation, access, utilize and

divulgence of

this data

as laid

out

in

the

Sun

Life Global

Privacy

Commitment and as might be required by neighborhood law and nearby

strategies Specifically, they utilize or unveil individual data legitimately and

reasonably, and reveal it just with the authorization of the individual to

whom it relates except if generally allowed or required by law. In specific

wards, our clients have the privilege to inquire as to whether we hold any

53

close to home data about them and, provided that this is true, to survey it.

They may likewise have the privilege to know how we gathered the data,

how we utilize it, and to whom we have revealed it. Access to individual

data inside Sun Life is by and large confined to those representatives who

have a genuine business motivation.

V. Researcher’s View/Analysis on the Prospect of the Firm’s mandate/Business

As climate change and global warming continues to threaten the world population,

the people need to know how to respond to risk in order to combat imminent and

possible economic downfalls. With the insurance company regarded as one the risk-

reducing investments, the industry would help influence and encourage people to

invest more in disaster and accident-preventing investments. As insurance industry are

accumulators of risk, insurance companies should be able to start providing more plans

and investments for their clients to invest more on the firm, related to disaster and

accidental risks. This would help Sun Life to be able to gather more clients and gain

more revenues, and to be able to fulfill their goals of providing lifetime financial stability.